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The weekly newsletter for everyone interested in barter--the world's most versatile business tool!

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January 18, 2000

In this week's report. . .

  • Barter industry attracts heavy-hitting venture capitalists
  • Excess merchandise offered to worldwide community of buyers
  • New site for mail order industry
  • Navy Admiral embraces barter
  • Barter employed to get new business up and running

 

Marketplace Benefits From Growing, Competitive Barter Industry

BarterTrust Has $55 Million and BigVine $50 Million

In Monday's (January 17) Wall Street Journal, a major story appeared on the cover of the second section titled, "Marketplace." The essence of the story was how some elite venture capitalists are betting that cyberspace will be just the place for a giant barter bazaar. Millions of dollars are being placed, it's a bet which provides several new online barter operations (BigVine.com and BarterTrust.com) with the necessary financing to develop an infrastructure for the trading of goods and services through cyberspace.

Heavyweight investors into BigVine include Kleiner Perkins Caufield & Byers, Kohlberg Kravis Roberts & Co., and American Express. BarterTrust is in talks with a General Motors subsidiary for additional funding. And, as reported earlier in our Tuesday Report, ShopNow.com acquired Ubarter.com for $45 million in stock.

What does all this mean to the millions of businesses in North America, as well as Europe and Asia? Increased prosperity, as these ever-widening conduits will provide huge markets for sales. And just as importantly, new avenues for making purchases, which will enable the ever-beleaguered small and mid-sized business community a greater liquidity. This, in turn, translates into more security as well as a heightened base from which to work and continue to build.


RetailExchange.com Promises Competition For Barter Marketplace

A new business-to-business online forum will specialize in the moving of excess retail goods, and could provide stiff competition for barter companies now handling excess merchandise.

The new company, RetailExchange.com, is partnering with the Gordon Brothers Group...the world's largest liquidator of excess retail inventories. Last year the Boston-based Gordon Brothers did more than $5 billion in sales of consumer goods on behalf of its retail clients.

Pre-qualified buyers and sellers will engage in a real-world negotiation process through the internet company by offering excess merchandise to a worldwide community of buyers.

Launch of the new web site is scheduled for Valentine's Day. Financing for the site is $11 million and comes from a consortium led by Internet Capital Group, an internet holding company.


Mail Order Industry's Excess Inventory Site

Xsmerch.com is a new business-to-business marketplace for the mail order industry. It's where one can get merchandise in front of Dmers (direct marketers), catalog houses, dollar stores, discounters, and close-out specialists.


Navy Admiral, Thinking Like An Entrepreneur, Becomes a Savvy Barterer

Admiral William "Bud" Flanagan is the commander of the Atlantic Fleet. As the czar of the 55-square-mile Norfolk Naval Base he oversees an $11 billion budget. And he's busily charting a course that will change the U.S. Navy. One of those changes embraces the ever-expanding use of barter.

Under the Navy's new rules, a commander who saves money or generates outside income can use the funds to buy new ships, planes or other equipment.

So Adm. Flanagan is busily trading empty Navy warehouses with the nearby Norfolk International Terminal, which is cramped for space. The terminal has agreed to load cargo onto Navy ships as payment, saving the Navy millions in outside labor costs.

Flanagan is also working with local developers, trading a landfill area with 440 somewhat-shabby Navy apartments for the building of better naval housing elsewhere.


Teacher Turned Entrepreneur Used Barter Getting Business "Off the Ground"

Nora Christensen wanted to start a cooking school, but her $2,500 in seed money wasn't enough to lease the space and buy the equipment she needed.

So the 37-year-old teacher-turned-entrepreneur came up with a work-space recipe: She struck a barter agreement with a company that gave her the use of a commercial kitchen in exchange for her meal-preparation skills.

The arrangement developed when Christensen responded to a newspaper ad. Bodine Electric, a motor manufacturer in Chicago, was looking for a vendor to operate its employee cafeteria. She arranged with Bodine to use the company's kitchen facilities to make lunches and dinners for its 500 employees.

With the help of a cook and a dishwasher she hired, Christensen provided Bodine's employees with gourmet meals at a guaranteed price per entree that was about the same as the cost of a fast-food meal.

In return, she got exclusive use of the kitchen when she was ready to open her cooking school. After a year, she was able to open the school Her advice to other companies with bartering arrangements is to maintain constant communication with their partner companies, and to speak frequently to the direct beneficiaries of their services.


New FM Stations May Dilute Commercial Radio's Audience

The Federal Communications Commission (FCC) is planning to open the nation's airways to some 1,000 new, low-power FM radio stations. A vote is scheduled for Thursday, January 20th.

The new stations, operating at power levels between 10 and 100, are expected to use parts of the radio dial that aren't occupied by existing full-power stations. Their reach is between one-mile and 3.5 miles in radius.

Despite the new stations' size, or lack thereof, the commercial broadcasters and their lobbying group (the National Association of Broadcasters) have objected to the plan, feeling there will be a serious impact (taking away listeners) on existing stations.



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